PPA taps First Metro Investment to underwrite P10-B bond issue

First Metro Investment Corp. (FMIC) has been tapped by the Philippine Ports Authority (PPA) to underwrite a proposed P5- to P10-billion, five-year fixed-rate bond issue for ports modernization, expansion, and operational expenditures.

The PPA is the government agency mandated to regulate and develop the country’s seaports. It is under the Department of Transportaion and Communications (DOTC).

FMIC officials could not yet give exact details but said that it would likely be launched in the first half of 2006.

The PPA reported a net income of P2.16 billion in the first nine months of the year, slightly higher than the P2-billion earnings in the same period last year. Revenues grew by six percent to P4.38 billion although port authorities admitted that foreign vessel calls dropped slightly while domestic vessels increased port calls.

It forecasts higher expenses this year and in 2006. Repair and maintenance costs, security, and utility costs are expected to expand significantly.

This would be the first issue of FMIC for 2006.

Recently, it was tapped to co-underwrite the P15-billion combined Tier 1 and hybrid Tier 2 capital offering of government financial institution Development Bank of the Philippines (DBP). The joint lead managers and selling agents are HSBC, Deutsche Bank and FMIC, while selling agents are Multinational Investment Bancorp., the Land Bank of the Philippines, and DBP.

With the hybrid capital-raising effort, the DBP hopes to increase its capital adequacy ratio (CAR) to 38 percent from its present 21 percent.

FMIC executive vice president Roberto Juanchito T. Dispo said that they expect t o also participate in the annual issue of retail treasury bonds (RTBs) by the Bureau of Treasury (BTr) along with fellow fund managers, the Metropolitan Bank and Trust Co. (Metrobank), the LBP, and the DBP.

"We also expect to participate in bond issues of the major corporates including the Philippine Long Distance Co. (PLDT), Globe Telecommunications, and San Miguel Corp.," Dispo added.

FMIC is also prepared to participate in the capital-raising activities by the National Power Corp. (Napocor), the Metropolitan Waterworks Sewerage and System (MWSS), and the Home Guarantee Corp.

FMIC is a subsidiary of the Metrobank Group and is considered the leading non-bank investment company in the country.

It was previously involved in the landmark P7-billion retail corporate bond issue of Ayala Corp. at the start of the year. This was followed by the P3-billion bond issue of Globe Telecoms, the P3-billion issue of Unilever, the P2.75 billion bond issue of Filinvest Land Corp., and the P1.867 billion preferred shares sale of Aboitiz Equity Ventures.